Unfortunately, it looks like threaded mode is broken for blocking users. Can you tell me if it broken for either of the other display modes? (click options in the upper right, then select either hybrid or standard or linear.)

It appears to work in standard mode but not hybrid.

Although, Hybrid hides the blocked users post altogether and standard mode shows the post but gives you the option to click to view or to unblock user. I like the mode that hides the post altogether.